Last month, as part of College Art Association (CAA)’s annual conference, the New York Foundation for the Arts (NYFA) partnered with CAA to offer a one-day program entitled “The Artist as Entrepreneur.” The presentation centered around core business concepts every member of the art community should know so that they have the best chance of succeeding in the creative economy. After all, most members of the art industry making their living from their creativity will at one time or another be working for themselves. Perhaps you are a freelance photographer, a fine artist selling work through a gallery, a graphic designer doing freelance work on the side, or maybe you work in a non-art related job during the day but have a second career in the arts during your off-hours. Being an artist entrepreneur means you will frequently be confronted with the realities of managing your art business.
Understanding the business of art can be challenging for creative types who have been trained to be creative, not on the mundane tasks associated with businesses. “The Artist as Entrepreneur” sets out to change that by walking attendees through the most important business concepts and challenges facing the aspiring art entrepreneur, including lectures by top industry members and workshops that place attendees in the middle of hypothetical scenarios. Attendees can’t be passive listeners but must think through the proposed business challenges using the learned knowledge and tool provided by NYFA. The program focused on five core business elements:
1) Law 2) Fundraising 3) Marketing 4) Finance and 5) Strategic Planning.
Unfortunately, it would be impossible to explore all that “The Artist as Entrepreneur” program had to offer in this short article. However, since 2010, NYFA has been developing programming and resources that discuss these core concepts. The following provides an overview and lists resources that you can use to learn more.
Understand Legal Considerations Affecting Your Business
Art law is an amalgam of legal concepts that affect the art entrepreneur, from business law to intellectual property protection and litigation. Art law is full of arcane legal language, making easy topics difficult to understand. At our sister site, Art Law Journal, we work hard to break legal concepts down into easy to follow ideas. NYFA’s law program within “The Artist as Entrepreneur” does the same. The program focuses on four main legal concepts:
- Contracts are the center of any business transaction. A contractual relationship requires (1) an offer, (2) acceptance of the offer, and a (3) valid exchange of something valuable. Each party to the contract then acquires rights to whatever is spelled out in the agreement, whether it is the right to use a photo or the right to services performed.
- Intellectual Property includes copyright, trademarks, and patents, which protect your artwork, name, slogan, designs or inventions. Copyright is the most important law for the artists as it gives the creator of a work the exclusive right to make copies or derivatives, distribute or publicly show their work. However, those rights are limited by the doctrine of fair use, which allows the use of copyrighted material without having to first acquire permission from the copyright holder. Some types of fair use are clear cut, like using copyrighted materials in teaching and research, while others have no bright line and are determined by the courts on a case-by-case basis.
- Choosing the right corporate structure, such as whether a company should be an Inc. or an LLC is also a critical business decision. Business entities protect your personal assets from legal problems arising out of your business and each type has varying benefits and downsides.
- Insurance can save you from things out of your control, as well as mistakes you might make along the way. Nobody is perfect and things do happen. Unfortunately, in some cases, those problems can have severe consequences. Insurance is the key to keeping your business and artistic practice afloat in times of crisis.
NYFA has some excellent legal resources on its NYFA Legal Page including articles and videos like Your Art Will Outlive You – How to Protect it Now!, Fair Use and Copyright Law, Copyright, Fair Use, and the New Borrowers. NYFA also has quite a few resources related to insurance, which you can find on the NYFA insurance Preparedness page.
Given the importance of understanding fair use, the CAA has created a detailed treatise; Code Of Best Practices In Fair Use For The Visual Arts, which describes how fair use can be invoked and implemented. CAA also has additional intellectual property resources in the CAA IP legal page including US Copyright: Fundamentals & Documents and Image Sources and Rights Clearance Agencies.
And of course, don’t forget all the resources you can find on Art Law Journal. We have articles on the legal topics discussed above and much more.
Learn How to Market Yourself
Marketing is a much more extensive topic than most people realize. Marketing seems to be relegated to merely the task of letting the public know about a particular product or service, such as through advertising or social media. However, that is only one aspect. Marketing focuses on the entire management process through which products and services move, from the initial concept to landing in the customer’s hands. The process is often described as the 4 Ps: Product, Price, Place (distribution) and Promotion (advertising and PR).
NYFA’s section on marketing in “The Artist as Entrepreneur” reorganized the 4 Ps into an easier to understand series of steps necessary for starting your own art business.
- Identify, reach, and build your audience
- It is important to know who wants your work before you do anything else. For example, if you are a wedding photographer, it wouldn’t pay to target children or the elderly. You want to target those most likely to get married. Additionally, determining the market size by area can reduce waste. If you target a town that is mostly elderly people, you would be wasting money whereas a young, hip area with a large population of twenty-somethings would be more cost effective.
- Craft a message
- Once you know your audience, determine what taglines and information will be most likely to grab them. Try to discover the habits, likes, and dislikes of people in those areas. Are they wealthy, liberal or conservative? Do they like sports or adventure? Highlighting an amazing adventure wedding you shot but is out of the price range of the target audience may not grab them, regardless of how beautiful the images may be.
- Target appropriate channels and social media
- Once you have crafted the proper message, you must get that message heard by the target audience. You’ll need to find out what types of media your audience consumes. Try to find out which social media channels your audience use most. Is it Facebook or Instagram? Do they read the local newspapers?
For marketing information, look no further than NYFA’s Marketing page, which includes resources such as Marketing for Artists in the Digital Age, Marketing 101: How to Share Your Story, and Creating An Artist Website.
Also, remember that marketing resources don’t have to be geared specifically toward art. As an art entrepreneur, you can adapt generic marketing advice to fit your art business. Take a look at sites such as Skillshare or Udemy as they both have numerous courses other information around marketing a small business. One of my favorites is about Instagram Marketing. Also check out The Modern Marketing Workshop by Seth Godin, one of the most sought after marketing gurus around.
Identify Fundraising Opportunities
If you are an art entrepreneur, you might be able to avail yourselves of one of the myriad grants made available to artists. While it is possible that some programs may be cut if the National Endowment for the Arts is defunded, there are still so many other opportunities from foundations and non-profit groups all over the country. As well, local government will still be funding programs and grants. For example, in Miami-Dade County, Florida, you can go to the Grants for Artists page, which lists a host of art programs and grant opportunities available to Florida residents.
One thing you should be aware of, however, is that grant writing is not easy. There is a certain method to the madness. If you have a grant you would like to apply for, then you might want to enlist some help from local organizations to help you understand the process. Also, you can download NYFA’s Guide to Grant Writing, which takes the reader by the hand to navigate the fundraising process, demystifying many of the daunting components that line the road to funding.
Another approach to fundraising is through crowdfunding. Kickstarter and Indiegogo are the most popular but have significant differences in their approach to money. Kickstarter will release funds only after the campaign reaches its funding goal. If you don’t make your target, then you don’t get anything. Indiegogo, on the other hand, gives you a choice between receiving funding as it comes in or waiting to see if you hit your target. Before using crowdfunding for a project, take a look at Udemy’s Crowdfunding for Artists: Get Funding to Create Your Artwork. With 33 lectures and 3 hours of video content, this course will take you through clear and simple steps for planning your campaign.
Finally, you can also apply to NYFA’s Fiscal Sponsorship program, which gives an artist or emerging arts organization access to funding opportunities and other resources through an affiliation with a tax-exempt 501(c)(3) organization. NYFA Fiscal Sponsorship is one of the oldest and most reputable programs of its kind in the country so be sure to check it out if you are looking to raise money for a project.
Tackle Financial Planning for Your Art Business
Doing your finances and taxes should elicit an audible groan. It is one of the least exciting aspects of any business, but also one of the most important. Of all things financial, accounting probably plays the largest role. At the very core of any business is the understanding as to how much money you have, how much you project to have in the future, and how much you need each month given your expenditures to not go broke. Having a lot of work from which you are owed money does no good if you can’t pay your rent.
Admittedly, accounting can be confusing (and boring) but if you can get your accounting software set up properly, it will make your life a lot easier. Most packages connect directly to your bank, pulling data from bank accounts and credit cards so you rarely have to log anything. You merely pull the transactions from the bank and then adjust the categories the bank may have chosen. Do it properly and you can prepare reports for your accountant at tax time, that will reduce their preparation and save you money.
Accounting software can also generate reports you need to manage your finances. The three most important reports are the balance sheet, income statement and cash flow statement. A balance sheet summarizes your assets and liabilities at a specific point in time so that you know how much you are worth. If you have $100 worth of stuff, including cash, and owe $50 for things like rent, then you have $50 leftover, which is how much you are worth. The income statement shows how well your company performed financially over a specific period. Knowing how you did in the past, can help you to estimate future performance. Finally, the cash flow statement identifies the cash that is flowing in and out of the company. It is an evaluation of your spending habits. For example, if you are consistently generating more income (cash) than you are spending, you know how much you can safely take out to buy new equipment or give as bonuses.
For more on working with financial statements look at NYFA’s Finance Page, which includes videos and articles such as Are you ready for tax season?, How to Budget as an Artist, and an Overview Of Tax Law For Artists. Also check out accounting software such as Quicken, Xero, Freshbooks and Zoho Accounting.
Learn Strategic Planning for Art Entrepreneurs
Finally, we look at strategic planning, which defines your art business or artistic practices’ direction for the future. It sets the priorities and defines the areas where you will focus your energy and resources. Strategic planning is determined through various exercises which analyze numerous business activities and the market environment. For example, a SWOT analysis measures the strengths, and weaknesses of your art business against the opportunities and threats from your external environment. The strategic plan will not only determine your future direction but ensure that all the players and key partners in your art business are all on the same page.
Even if you are a solo art entrepreneur, it is still a good idea to go through the strategic planning exercises to make sure that you understand your art business. The process forces you to look at how your art business operates and know every detail of the market in which you are doing business. Admittedly, it is not easy but exceptionally effective and worth the time and effort.
Many businesses use the “throw things against the wall and see what sticks” approach, where the ones that work become the future tactics. Unfortunately, with that approach you won’t really know why things work or don’t work. Just because something works, doesn’t mean it is the best approach. Some other tactics may have worked even better and been less costly. Or something that didn’t work may have just been bad timing. More importantly, strategic planning ensures that if there are dramatic market changes that are affecting your business, you will understand what is happening and why it is happening. You can then pivot to a new direction that minimizes your risk and perhaps creates opportunity. The more knowledge you have about your business and the market, the better you can handle any problems that come along.
As part of the strategic planning process, “The Artist as Entrepreneur” program suggests doing a Business Model Canvas. It helps organize the key factors and the players. Here is an example of what one might look like.
For more information in developing a canvas, look at How Can a Business Model Sustain Art? on the NYFA website. You can also check out two online tools, the Strategyzer’s Canvas or Cowan’s 20 Minute Business Plan: Business Model Canvas Made Easy.
While these tasks may seem daunting, and probably not a lot of fun, they are worth your effort. The art industry is one of the most competitive markets around, so you should gain any advantage you can. You don’t want to work hard on your art business and not see it fulfill its potential. While these business tasks may take a bit of time and energy, it really is minimal relative to the creative part of your art business. Take the entrepreneurial aspects of your art business seriously and you can help ensure that you will spend your adult life doing what you love, creating your art. However, if you want to take a shortcut, we suggest participating in a future professional development program at NYFA.
Did you attend NYFA’s Artist as Entrepreneur program? Let us know what you thought!